Virtual currency speculation and hype are on the rise; thirteen departments jointly crack down on illegal financial activities.

Securities Times reporter He Jueyuan

The People’s Bank of China recently held a meeting of the coordinated working mechanism to crack down on virtual-coin trading and speculation. Representatives in charge from 13 departments, including the Ministry of Public Security and the Cyberspace Administration of China, attended the meeting. The meeting called for continuing to uphold the prohibitive policy on virtual currencies and to steadily crack down on illegal financial activities related to virtual currencies.

The meeting pointed out that in recent years, based on the requirements of the “Notice on Further Preventing and Disposing of Risks from Virtual-Currency Trading and Speculation” jointly issued by the PBOC and ten other departments in 2021, relevant entities have firmly cracked down on virtual-currency trading and speculation, rectified disorder in the virtual-currency space, and achieved notable results. Recently, affected by multiple factors, speculation and hype around virtual currencies have shown signs of picking up, related illegal and criminal activities have occurred from time to time, and risk prevention and control faces a new situation and new challenges.

The meeting emphasized that virtual currencies do not have the same legal status as legal tender; they are not acceptable for payment. They should not and cannot be circulated and used as currency in the market. Businesses and activities related to virtual currencies fall under illegal financial activities. Stablecoins are a form of virtual currency. At present, they cannot effectively meet requirements such as customer identity verification and anti–money laundering. They carry risks of being used for illegal activities such as money laundering, fundraising scams, and unlawful cross-border transfers of funds.

This meeting requires that all units take risk prevention and control as an enduring theme of financial work, continue to adhere to the prohibitive policy on virtual currencies, and steadily crack down on illegal financial activities related to virtual currencies. All units should deepen coordinated cooperation, improve regulatory policies and legal bases, focus on key areas such as information flows and capital flows, strengthen information sharing, further enhance monitoring capabilities, severely crack down on illegal and criminal activities, protect the property safety of the people, and maintain stable economic and financial order.

In recent years, virtual currencies issued by market institutions—especially stablecoins—have continued to emerge, but overall they are still in an early stage of development. Financial management departments such as international financial organizations and central banks generally hold a cautious attitude toward the development of stablecoins. In a report titled “The Next Generation of Money and the Financial System” released in June this year, the Bank for International Settlements (BIS) explicitly expressed concern about stablecoin risks, noting that stablecoins have shown some promise in tokenization, but in the three key tests of singularity, resilience, and completeness, they still have not met the requirements to become a pillar of the monetary system. The report believes that what role stablecoins will play in future monetary systems remains to be seen.

Since this year began, financial regulators in various parts of China have noticed that some illicit institutions, under the names of “financial innovation,” “digital currency,” “digital assets,” and “blockchain technology,” have been absorbing funds through ways such as issuing or hyping investment projects that use new concepts as a lure, promising high returns, and inducing the general public to participate in trading and speculation. At present, financial regulators in various places or industry self-regulatory organizations have issued risk warnings, emphasizing that stablecoins are not tools for investment or speculation.

Earlier, at the 2025 Caijing Financial Street Forum, Pan Gongsheng, governor of the People’s Bank of China, said that the central bank will work with law-enforcement departments to continue cracking down on the operation and speculation of virtual currencies within China, and to maintain economic and financial order, while also closely tracking and dynamically assessing the development of stablecoins overseas.

(Editor: Wen Jing)

Keywords:

                                                            Virtual currency